Michigan reverses 70% of unemployment fraud cases, to refund more than $20 million

LANSING, Mich. (AP) - The state of Michigan says it has reversed 70% of unemployment benefit fraud cases and is refunding $20.8 million after people were wrongly accused of collecting excessive benefits.

The Unemployment Insurance Agency announced the results of a review Friday. It reviewed more than 62,000 cases for people who were assessed a fraud penalty and did not seek an appeal. About 44,000 cases were reversed.

Michigan has been under fire for a computer system that wrongly churned out cases of fraud. Last month, it dropped criminal charges against 186 people.

Over a two year period, Gov. Rick Snyder's administration mostly relied on the computer system to flag thousands of people. They were hit with penalties, wage garnishments and lost tax refunds - before the state admitted it was wrong.

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The state of Michigan is dropping charges and arrest warrants against nearly 200 people accused of illegally collecting unemployment benefits.

The warrants were issued against people who never showed up for court hearings after they were accused of defrauding the unemployment system. In many cases, the accused never knew they were charged with a crime.

The Michigan Talent Investment Agency asked for the arrest warrants to be dismissed because there’s a good chance the people accused actually didn’t do anything wrong.

The Michigan Court of Appeals dismissed a lawsuit claiming the state wrongfully accused thousands of people of unemployment fraud.

In 2013, the state started using an automated system to flag fraud cases. But the system wrongly identified tens of thousands of people – and some of them sued to get their money back, plus fees and interest.